A security official stands in front of a burning section of The Taj Mahal hotel in Mumbai on November 29, 2008.

Indian police have arrested a key suspect accused of coordinating the 2008 Mumbai terror attacks in which 166 people were killed and more than 300 wounded, the government said Monday.

Abu Hamza, also known as Sayed Zabiuddin, an Indian-born member of the Pakistani militant group Lashkar-e-Taiba, was detained at Delhi international airport on June 21 when he arrived from the Middle East.

Hamza was allegedly one of the handlers based in the Pakistani city Karachi, who issued instructions by telephone to the 10 Islamist gunmen as they stormed two luxury hotels, a Jewish centre, a restaurant and a train station in Mumbai.

"The Delhi police has done a magnificent job. I am sure that the investigations will take place and we will wait till the investigations," India's External Affairs Minister S.M. Krishna told reporters.

Hamza, who has used a string of aliases, had been living in Saudi Arabia in recent years and is now being held in police custody in Delhi, the Press Trust of India (PTI) news agency reported.

Indian media citing police sources said that Hamza was aged 30 and came from the western state of Maharashtra, of which Mumbai is the capital.

Pakistani national Mohammed Ajmal Amir Kasab, the only gunman caught alive during the 60-hour assault on Mumbai in November 2008, was handed down a death sentence by the Bombay High Court last year.

Lawyers prosecuting Kasab have said that Hamza taught the gunmen some Hindi and that his voice can be heard on taped conversations with the attackers during the carnage.

India blames the Lashkar-e-Taiba militant outfit, which is banned in Pakistan, for training, equipping and financing the Mumbai gunmen with support from "elements" in the Pakistan military.

Pakistan has indicted seven alleged perpetrators over the attacks but their trial, which began in 2009, has been beset by numerous delays triggering Indian accusations that the process is a sham.

The United States in April offered a $10 million reward for information leading to the conviction of Hafiz Saeed, the founder of Lashkar-e-Taiba who lives openly in Pakistan and is accused of masterminding the Mumbai attacks.